Interesting

Ana Joaquim, from Wood Green, who is originally from Portugal, earns £8.50 an hour as a barista at BEIS, which outsources its catering to a company called Aramark.

Looking out my window into Portugal where the minimum wage is €600 a month or so.

So, Ana, you should be paid more why?

For Biggie

A slightly puzzling thought here:

Of course a privateer statelet like Singapore or Hong Kong can get rich that way. The upper bound seems to be approximately Switzerland, and plenty of smaller states ain’t no Switzerlands. Britain is well above that upper bound.

So, small states and small states only can prosper by having low barriers to trade with hte rest of the world. Large states cannot.

Hmm.

But large states have no internal barriers to lots and lots of trade among their large population. Something which makes those places richer. The internal economy is always much larger than any international trade.

So we seem to be saying that tariff free no barrier trade is just super except when it crosses national borders. Which doesn’t seem to work either as a piece of logic nor empirically.

Why not?

Speaking separately Mr Fox admitted a zero tariff approach was among a range of options being considered.

But he insisted that was not “what I would propose and I have not actually heard anyone else in government propose it”.

Is there no one in government who understands the basic economics of trade? That unilateral free trade is the only logical stance?

Rather fun

Modern monetary theory seems to be just macroeconomic populism:

Macroeconomic populism is an approach to economics that emphasizes growth and income distribution and deemphasizes the risks of inflation and deficit finance, external constraints and the reaction of economic agents to aggressive non-market policies

In more detail:

Macroeconomic populism is a term coined by Rudi Dornbusch and Sebastian Edwards in a 1990 paper.[1] The term refers to the policies by many Latin American administrations by which government spending and real wages increase in a non-sustainable way leading to inflation, then stagflation and ultimately an economic collapse that drops real wages to lower than they were before the populist period began. The paper cites as examples Salvador Allende in Chile (1970–1973), and Alan García first term in Peru (1985–1990). In 1991, Dornbusch and Edwards edited a book titled The Macroeconomics of Populism in Latin America which analyzed more cases like Argentina between 1973 and 1976, Mexico between 1970 and 1982, and Brazil.[2]

The heart of development economics

The reason places like Africa are poor is not because of capitalism, exploitation, the residues of colonialization, or even the long, dark shadow of the slave trade. Nor is it poor even because of idiotic socialism or the propensity of politicians to run off with the national treasury. You can blame any selection of those as you wish, and with some of them you’d even be right, but they are all proximate causes. The ultimate reason is simply that poor places are using less productive technologies, richer ones more productive. All of those varied things can be blamed for reducing the use of more advanced technologies, but it is the lack of technological advance itself that causes the poverty.

Fun and interesting

Hundreds of customers with smart meters will cook their Christmas Dinner without paying a penny for their power, after Octopus Energy said it would offer four free hours of energy.

The challenger brand said it would enable the price pause by tweaking its so-called “time of use” tariff, which is available to people with smart energy meters. Octopus is making the festive gesture following fears that smart meters might cause bills to spike at times of high demand because of “surge pricing”.

Greg Jackson, the chief executive, said the supplier wanted to show that “plunge pricing” was possible too.

Industrial usage of electricity being about nothing on this day, right?

Actually, don’t we get to see the stats on this in real time these days? Percentage of ‘leccie from different sources etc? And is the auction market price also listed? And, if it is, what was that price last Xmas Day? Anyone got this to hand?

Stupidity

An agreement has been reached at the eleventh hour between Chief Pleas and Sark Electricity to keep the power on and avoid any disconnection.

The two parties initially failed to reach a deal during a meeting on Wednesday evening and the power was set to be cut off at midnight tonight.

Sark Electricity had been in dispute with Chief Pleas for a number of months after the government forced the company to drop its price 14 pence to 52p per unit recommended by an independent price regulator.

The agreement reached last night now states the price of electricity will go back up to 66p per unit to allow the company to sell supplies without losing money.

Sark’s government now has three months to buy Sark Electricity.

Electricity on Sark will cost what electricity on Sark costs. Doesn’t matter who owns it. Tey can – and probably will – subsidise it thought taxes. But it’ll still cost the same.

The global 1%

When left populists rail against elites they are generally referring to economic and political power. Their target is the richest 1% that owns half the world’s wealth: the newspaper moguls, bankers, political donors and corporate lobbyists; Tony Blair, the Clintons, the Bushes, Old Etonians, Old Harrovians, Oxford, Cambridge, Yale, Harvard, Bullingdon. Those people who run things unchecked from a position of absolute and relative privilege that is often inherited. The left believes that the prospects for democracy weaken as inequalities grow and oligarchies emerge which govern in their own interests. Society then operates according to the golden rule – those who have the gold make the rules.

But when rightwing populists focus on elites they are mostly referring to culture. Their targets are filmmakers, actors, lecturers, journalists, “globalists”, spiritualists, scientists and vegans; the Clintons, Hollywood, Londoners, New Yorkers, Silicon Valley, Sussex and Berkeley.

All of those will be in the global 1%. Own a home and a pension in Britain? Global 1% pretty much.

Teaspoons

The village was originally home to 40 staff and their families, as well as the hub of activity for the 1,200 workers who laboured on the dam. Waitaki Dam was the last in New Zealand to be constructed using , as part of a government initiative to reduce the unemployment rate.

Logic professor, logic

The late Prof Mick Moran, who taught politics and government at Manchester University for most of his professional life, had, according to his colleagues, once had “a certain residual respect for our governing elites”. That all changed during the 2008 financial crisis, after which he experienced an epiphany “because it convinced him that the officer class in business and in politics did not know what it was doing”.

After his epiphany, Moran formed a collective of academics dedicated to exposing the complacency of finance-worship and to replacing it with an idea of running modern economies focused on maximising social good.

If the officer class is clueless – obviously it is and that applies to any group we might promote to such status – then there’s no manner of “running” the economy is there? Which is, of course, why we use liberty and markets to do so, so that there’s no clueless wonder “running” things.

It’s the but which is wrong here

Self-driving lorries and digital technology will fundamentally reshape the logistics industry, slashing costs and boosting efficiency.

The claim comes in a new study from PricewaterhouseCoopers which predicts huge benefits for businesses which need to move goods around – but mass job losses among those currently working in the sector.

It’s “because mass job losses.”

The Horror, The Horror

Two big shackles hold in check the growth of more alternatives. Easily the biggest is capital: ventures such as co-ops struggle to raise the necessary cash. The holders of capital often seek short-term rewards, are unwilling to take large risks, and have no place on their spreadsheets for social purpose.

But if it has outside capital then it’s not a co op, is it?

Jeez.

Rilly Willy?

For markets, even though neither Gove nor Fox wants openly to concede it, don’t work as the ideology predicts. Market economies need the state, European-style.

That’s why all the richest economies in the world are in continental Europe, are they?

An interesting little proof

The west’s leading economic thinktank has warned that the expansion in the global economy may have peaked after cutting its growth forecasts for an array of rich and developing countries.

In its latest update on the health of the world economy, the Organisation for Economic Cooperation and Development said the outlook for both 2018 and 2019 was less good than it had predicted in May.

The Paris-based OECD called for immediate action to halt the “slide towards protectionism”, noting that trade tensions were already having an impact on confidence and investment.

“The expansion may now have peaked,” the OECD said in its interim economic outlook. “Global growth is projected to settle at 3.7% in 2018 and 2019, marginally below pre-crisis norms, with downside risks intensifying.”

The OECD said it was cutting its 2018 forecast by 0.1 percentage points and its 2019 forecast by 0.3 points.

Britain has had its growth forecast shaved by 0.1 points in both years to 1.3% and 1.2%, respectively – with the OECD saying the squeeze on living standards was affecting consumer spending and uncertainty about Brexit leading to soft investment.

The global economy is growing faster than the British. The poor are getting richer faster than we are – global inequality is falling.

Well, yes, maybe so, but…..

The next downturn could rival the Great Depression and wipe $10 trillion off US household assets

The but being, US household assets are about $100 trillion. A 10% decline is rather less scary really. Further, $10 trillion is about how much they’ve gone up in value in 18 months or so (about $2 trillion a quarter recently).

Such a decline ain’t nice but…..

The world’s major economies are skating on dangerously thin ice and lack the fiscal, monetary, and emergency tools to fight the next downturn.

A roster of top crisis veterans fear an even more intractable slump than the Lehman recession when the current ageing expansion rolls over. The implications for liberal democracy are sobering.

“We have no ability to turn the economy around,” said Martin Feldstein, President of the US National Bureau of Economic Research.

“When the next recession comes, it is going to be deeper and last longer than in the past. We don’t have any strategy to deal with it,” he told The Daily Telegraph.

Well, according to the best research (Milton Friedman) what caused the Depression was bad government policy. So, as long as we don’t repeat FDR’s mistakes we’ll not have another one. Sure, we might not have the stuff to fight the next recession but that’s a different matter, that being why we call one thing a recession, the other a depression.

Oh, and yes, a $10 trillion hit to household assets would cause a recession, the wealth effect would take care of that.But then the business cycle will always be with us.